Beyond tokenised treasuries
September 2026
As tokenisation gathers momentum, Dr Shlomo Ovadiah and Dr Camila Ovadiah of S.P.O.T.T.Y. examine how blockchain infrastructure could unlock capital for underserved businesses and reconnect investment with the productive economy
Image: phive2015/stock.adobe.com
The blockchain industry promised to democratise finance. Instead, it is mostly digitising what already works. The real-world asset (RWA) tokenisation market has reached a key moment. Tokenised assets have surpassed US$15 billion in market capitalisation, with projections suggesting exponential growth ahead. Yet beneath the impressive figures lies a fundamental question the industry has largely avoided: are we using blockchain technology to solve the right problems?
The current wave of tokenisation has focused overwhelmingly on assets that traditional finance already handles efficiently, such as US Treasury bills, government bonds, money market funds (MMFs), and publicly traded equities. These initiatives may improve settlement speed and operational transparency, but they fail to address the structural failures that have left operating companies across the global economy underserved and underfinanced.
The distinction that matters
The term ‘real-world assets’ has become ubiquitous in blockchain circles, yet it obscures more than it clarifies. A more useful framework separates native digital assets from externally referenced assets. Native digital assets derive their existence from blockchain protocols themselves. Externally referenced assets — whether commodities, receivables, real estate, or equipment — exist in legal, physical, or financial systems outside the blockchain. The token represents a claim over something that must be independently verified, legally enforceable, and operationally maintained.
This distinction matters because it determines what blockchain can actually improve. Externally referenced assets depend on chains of human and institutional performance: someone must verify the asset exists, maintain custody, enforce legal rights, manage defaults, and ensure the digital record corresponds to physical and legal reality.
Where capital is not flowing
Traditional finance excels at funding standardised, liquid, large-scale instruments. These were optimised for a narrow set of assets while leaving vast portions of the productive economy without access to institutional capital. Consider the businesses that struggle to access global investment despite generating genuine economic value: agricultural producers managing working capital across harvest cycles; commodity traders financing inventory; regional manufacturers requiring equipment financing; warehouse operators holding verified inventory; family enterprises with operational history but limited financial reporting; and export-oriented businesses in emerging markets facing high transaction costs.
These businesses are not necessarily poor investments. They are expensive to evaluate, difficult to monitor, and inefficient to finance through systems designed around standardisation and liquid secondary markets. Traditional finance often ignores them because the cost of verification has historically exceeded the potential return.
This problem is particularly pronounced in developing and emerging markets. Productive businesses across Latin America, Africa, and Asia frequently possess strong fundamentals yet remain invisible to institutional investors. Economic viability is not the barrier.
The barrier is the infrastructure required to make these businesses investable at scale.
The tokenisation paradox
Blockchain technology is positioned to address this gap. Digital ownership records, continuous collateral monitoring, transparent production data, and auditable transaction histories can theoretically reduce the cost of trust. If verification becomes cheaper and ongoing monitoring more efficient, previously fragmented assets might become accessible.
Yet the current market is moving in the opposite direction. Rather than using blockchain to finance underserved productive assets, the industry is primarily repackaging instruments that already have deep liquidity. Tokenised Treasury bills improve settlement efficiency, but the US government has no difficulty borrowing. This creates the tokenisation paradox: the technology capable of reducing verification costs is being applied to assets that need it least, while businesses that could benefit most remain outside the system.
The explanation is straightforward. Tokenising existing securities presents fewer hurdles because the legal frameworks, custody infrastructure, and regulatory pathways already exist. But ease of implementation should not be confused with economic importance. If blockchain simply recreates yesterday’s portfolios with better software, it represents extraordinary technology serving ordinary ideas.
When ‘real-world assets’ are not real yet
The rush to capitalise on RWA momentum has produced another problem: the merging of potential with present reality. Across the tokenisation market, proposed projects are increasingly described using the language of existing assets. Planned mines, future agricultural production, and projected revenues are marketed as though the underlying value already exists.
The distinction between development-stage risk and asset-backed instruments is fundamental. Traditional finance developed necessary distinctions between existing assets and projected income precisely because markets repeatedly suffered losses when expectations were confused with present value.
Blockchain cannot transform a feasibility study into inventory or a permit application into a producing mine. Technology can strengthen evidence, but it cannot substitute for underlying legal and operational reality.
If ownership, custody, or enforceability remains uncertain, placing a token on a blockchain does not remove that uncertainty. It just makes the claim easier to transfer.
The risk transfer problem
Perhaps the most critical issue in RWA tokenisation is one that receives insufficient attention: who carries the loss when things go wrong? Risk is rarely eliminated in financial structures, it is transferred.
In tokenised RWA structures, holders may unknowingly absorb the failure of issuers, custodians, warehouse operators, technology providers, or legal counterparties.
The relevant questions are: who carries the risk? Do they understand it? Was the transfer consensual? Does the recipient have capacity to survive the loss?
RWA instruments are especially vulnerable because they depend on chains of human and institutional performance. Someone must verify the asset, maintain records, protect collateral, and manage defaults. When those parties lack competence, capital, or oversight, the risk is silently transferred to token holders.
Technology does not remove the human factor. A smart contract can execute instructions, but it cannot independently determine whether an invoice is fabricated, goods are pledged twice, or a warehouse operator has colluded with a borrower.
Building credible infrastructure
A credible RWA market requires more than placing information on a blockchain. It requires:
Independent verification: The underlying asset must be verified by qualified third parties. Legal ownership must be established. Rights of token holders must be clearly defined.
Auditable custody: Assets must be legally segregated from issuer balance sheets. Custody must be independently verifiable. Collateral must be protected from double-pledging.
Transparent valuation: Valuation methodologies must be disclosed and independently applied. Recurring proof of reserves and performance data should be standard.
Enforceable legal rights: Token holders must possess clear legal claims. Redemption mechanisms and default procedures must be established before issuance.
Aligned incentives: Originators should retain meaningful first-loss exposure. Verification, custody, and valuation should remain independent.
These requirements increase issuance costs, but necessary friction protects markets from instruments that should not exist in their proposed form.
A different approach
While much of the tokenisation industry focuses on repackaging traditional securities, a different model is emerging. A model that reconnects digital claims with identifiable, verifiable physical assets.
S.P.O.T.T.Y. is a tokenisation platform built on the Stellar blockchain that digitises commodity certificates for physical commodities already owned and stored in certified third-party facilities. Rather than creating exposure to commodity price movements through derivatives, S.P.O.T.T.Y. tokens represent defined physical units backed by verifiable inventory, including gold, crude oil, sugar, rice, cocoa, and lithium.
The first issued token, S.P.O.T.T.Y. Commodities Oil Token (SCOIL), is fully backed by crude oil.
The structure is designed around the commodity certificate model, comparable to traditional warehouse receipts. Each token provides a claim over physical inventory, not equity in the platform. There are no dividends or yield promises, only the right to redeem the underlying commodity through cash settlement or physical delivery. This approach addresses several structural challenges:
Verification and custody: Commodities are stored in regulated third-party facilities with independent attestation and regular audits. The platform does not act as a centralised custodian; custody and risk are separated across institutional custodians, storage providers, and token holders.
Transparency: Blockchain settlement provides continuous visibility into token issuance, transfers, and redemptions. The structure combines Canadian corporate governance, third-party storage providers, and onchain issuance.
Operational coverage: The model uses stored physical inventory, forward supply contracts, and liquidity capacity to support delivery and redemption obligations, operationally aligned with traditional commodity logistics.
Market access: By enabling fractional access, faster settlement, and programmable transferability within a regulated framework, the platform reduces barriers that have historically limited participation to large institutional players.
SCOIL exemplifies this model.
The SCOIL token represents fungible crude oil inventory stored in regulated facilities.
This structure addresses the settlement delays, transparency gaps, and high operational barriers that characterise traditional commodity markets.
It is a digital representation of physical inventory, designed to make verifiable commodity ownership accessible, transferable, and redeemable through blockchain infrastructure.
This is not speculative exposure to commodity indexes or derivative contracts.
The path forward
The RWA market stands at a crossroads.
One path leads towards incremental improvements in traditional finance. This path is valuable, but it does not fundamentally change who has access to capital. The other path uses blockchain to reduce the cost of trust in markets where verification has historically been expensive and access limited. It finances commodity inventory, regional manufacturers, and family enterprises that create economic value but have remained outside institutional portfolios.
Intelligent investing has never been about following the crowd more efficiently.
It is about identifying productive value before it becomes obvious and building the structures necessary to finance it responsibly.
The question is no longer whether the world can be tokenised. The relevant question is whether tokenisation is building a more productive and inclusive financial system merely reproducing the old one with better software.
For investors, platforms, and regulators willing to do the harder work, building verification infrastructure, establishing custody standards, and financing productive assets that have been overlooked, the opportunity remains significant. The technology exists. The productive assets exist. What is needed now is the discipline to connect them properly.
The current wave of tokenisation has focused overwhelmingly on assets that traditional finance already handles efficiently, such as US Treasury bills, government bonds, money market funds (MMFs), and publicly traded equities. These initiatives may improve settlement speed and operational transparency, but they fail to address the structural failures that have left operating companies across the global economy underserved and underfinanced.
The distinction that matters
The term ‘real-world assets’ has become ubiquitous in blockchain circles, yet it obscures more than it clarifies. A more useful framework separates native digital assets from externally referenced assets. Native digital assets derive their existence from blockchain protocols themselves. Externally referenced assets — whether commodities, receivables, real estate, or equipment — exist in legal, physical, or financial systems outside the blockchain. The token represents a claim over something that must be independently verified, legally enforceable, and operationally maintained.
This distinction matters because it determines what blockchain can actually improve. Externally referenced assets depend on chains of human and institutional performance: someone must verify the asset exists, maintain custody, enforce legal rights, manage defaults, and ensure the digital record corresponds to physical and legal reality.
Where capital is not flowing
Traditional finance excels at funding standardised, liquid, large-scale instruments. These were optimised for a narrow set of assets while leaving vast portions of the productive economy without access to institutional capital. Consider the businesses that struggle to access global investment despite generating genuine economic value: agricultural producers managing working capital across harvest cycles; commodity traders financing inventory; regional manufacturers requiring equipment financing; warehouse operators holding verified inventory; family enterprises with operational history but limited financial reporting; and export-oriented businesses in emerging markets facing high transaction costs.
These businesses are not necessarily poor investments. They are expensive to evaluate, difficult to monitor, and inefficient to finance through systems designed around standardisation and liquid secondary markets. Traditional finance often ignores them because the cost of verification has historically exceeded the potential return.
This problem is particularly pronounced in developing and emerging markets. Productive businesses across Latin America, Africa, and Asia frequently possess strong fundamentals yet remain invisible to institutional investors. Economic viability is not the barrier.
The barrier is the infrastructure required to make these businesses investable at scale.
The tokenisation paradox
Blockchain technology is positioned to address this gap. Digital ownership records, continuous collateral monitoring, transparent production data, and auditable transaction histories can theoretically reduce the cost of trust. If verification becomes cheaper and ongoing monitoring more efficient, previously fragmented assets might become accessible.
Yet the current market is moving in the opposite direction. Rather than using blockchain to finance underserved productive assets, the industry is primarily repackaging instruments that already have deep liquidity. Tokenised Treasury bills improve settlement efficiency, but the US government has no difficulty borrowing. This creates the tokenisation paradox: the technology capable of reducing verification costs is being applied to assets that need it least, while businesses that could benefit most remain outside the system.
The explanation is straightforward. Tokenising existing securities presents fewer hurdles because the legal frameworks, custody infrastructure, and regulatory pathways already exist. But ease of implementation should not be confused with economic importance. If blockchain simply recreates yesterday’s portfolios with better software, it represents extraordinary technology serving ordinary ideas.
When ‘real-world assets’ are not real yet
The rush to capitalise on RWA momentum has produced another problem: the merging of potential with present reality. Across the tokenisation market, proposed projects are increasingly described using the language of existing assets. Planned mines, future agricultural production, and projected revenues are marketed as though the underlying value already exists.
The distinction between development-stage risk and asset-backed instruments is fundamental. Traditional finance developed necessary distinctions between existing assets and projected income precisely because markets repeatedly suffered losses when expectations were confused with present value.
Blockchain cannot transform a feasibility study into inventory or a permit application into a producing mine. Technology can strengthen evidence, but it cannot substitute for underlying legal and operational reality.
If ownership, custody, or enforceability remains uncertain, placing a token on a blockchain does not remove that uncertainty. It just makes the claim easier to transfer.
The risk transfer problem
Perhaps the most critical issue in RWA tokenisation is one that receives insufficient attention: who carries the loss when things go wrong? Risk is rarely eliminated in financial structures, it is transferred.
In tokenised RWA structures, holders may unknowingly absorb the failure of issuers, custodians, warehouse operators, technology providers, or legal counterparties.
The relevant questions are: who carries the risk? Do they understand it? Was the transfer consensual? Does the recipient have capacity to survive the loss?
RWA instruments are especially vulnerable because they depend on chains of human and institutional performance. Someone must verify the asset, maintain records, protect collateral, and manage defaults. When those parties lack competence, capital, or oversight, the risk is silently transferred to token holders.
Technology does not remove the human factor. A smart contract can execute instructions, but it cannot independently determine whether an invoice is fabricated, goods are pledged twice, or a warehouse operator has colluded with a borrower.
Building credible infrastructure
A credible RWA market requires more than placing information on a blockchain. It requires:
Independent verification: The underlying asset must be verified by qualified third parties. Legal ownership must be established. Rights of token holders must be clearly defined.
Auditable custody: Assets must be legally segregated from issuer balance sheets. Custody must be independently verifiable. Collateral must be protected from double-pledging.
Transparent valuation: Valuation methodologies must be disclosed and independently applied. Recurring proof of reserves and performance data should be standard.
Enforceable legal rights: Token holders must possess clear legal claims. Redemption mechanisms and default procedures must be established before issuance.
Aligned incentives: Originators should retain meaningful first-loss exposure. Verification, custody, and valuation should remain independent.
These requirements increase issuance costs, but necessary friction protects markets from instruments that should not exist in their proposed form.
A different approach
While much of the tokenisation industry focuses on repackaging traditional securities, a different model is emerging. A model that reconnects digital claims with identifiable, verifiable physical assets.
S.P.O.T.T.Y. is a tokenisation platform built on the Stellar blockchain that digitises commodity certificates for physical commodities already owned and stored in certified third-party facilities. Rather than creating exposure to commodity price movements through derivatives, S.P.O.T.T.Y. tokens represent defined physical units backed by verifiable inventory, including gold, crude oil, sugar, rice, cocoa, and lithium.
The first issued token, S.P.O.T.T.Y. Commodities Oil Token (SCOIL), is fully backed by crude oil.
The structure is designed around the commodity certificate model, comparable to traditional warehouse receipts. Each token provides a claim over physical inventory, not equity in the platform. There are no dividends or yield promises, only the right to redeem the underlying commodity through cash settlement or physical delivery. This approach addresses several structural challenges:
Verification and custody: Commodities are stored in regulated third-party facilities with independent attestation and regular audits. The platform does not act as a centralised custodian; custody and risk are separated across institutional custodians, storage providers, and token holders.
Transparency: Blockchain settlement provides continuous visibility into token issuance, transfers, and redemptions. The structure combines Canadian corporate governance, third-party storage providers, and onchain issuance.
Operational coverage: The model uses stored physical inventory, forward supply contracts, and liquidity capacity to support delivery and redemption obligations, operationally aligned with traditional commodity logistics.
Market access: By enabling fractional access, faster settlement, and programmable transferability within a regulated framework, the platform reduces barriers that have historically limited participation to large institutional players.
SCOIL exemplifies this model.
The SCOIL token represents fungible crude oil inventory stored in regulated facilities.
This structure addresses the settlement delays, transparency gaps, and high operational barriers that characterise traditional commodity markets.
It is a digital representation of physical inventory, designed to make verifiable commodity ownership accessible, transferable, and redeemable through blockchain infrastructure.
This is not speculative exposure to commodity indexes or derivative contracts.
The path forward
The RWA market stands at a crossroads.
One path leads towards incremental improvements in traditional finance. This path is valuable, but it does not fundamentally change who has access to capital. The other path uses blockchain to reduce the cost of trust in markets where verification has historically been expensive and access limited. It finances commodity inventory, regional manufacturers, and family enterprises that create economic value but have remained outside institutional portfolios.
Intelligent investing has never been about following the crowd more efficiently.
It is about identifying productive value before it becomes obvious and building the structures necessary to finance it responsibly.
The question is no longer whether the world can be tokenised. The relevant question is whether tokenisation is building a more productive and inclusive financial system merely reproducing the old one with better software.
For investors, platforms, and regulators willing to do the harder work, building verification infrastructure, establishing custody standards, and financing productive assets that have been overlooked, the opportunity remains significant. The technology exists. The productive assets exist. What is needed now is the discipline to connect them properly.
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